Indian Tourism Industry

By; Muskan Asnani Vinod Chauhan (PGDM 11-13,IILM –AHL,Jaipur)

Definition

• Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people who "travel to and stay in places outside their usual environment for more than twenty-four hours and not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited".

Contribution of Indian tourism to the economy

1. Employment generation, Poverty alleviation, and sustainable human development.

2. Second highest foreign exchange earner for India.3. Contributes to the economy indirectly through linkages

with other sectors like agriculture, poultry, horticulture, handicrafts and construction.

4. Domestic tourism plays a vital role in achieving the national objectives of promoting social, cultural cohesion and integration.

Tourism growth in India

According to World Tourism Organization estimates, India will lead in South Asia with 8.9 million arrivals by 2020

India is poised to emerge as the 2nd fastest growing (8.8%) tourism economy in the world over 2005-14 according to the World Travel & Tourism.

Industry structureC n K,

Thomas Cook ,SOT

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Forms of tourism

1) Cultural tourism & Round Trips – covering the popular circuits comprising of the Golden Triangle, Rajasthan, N. India & in South the well known temples, backwaters & beaches.

2) Mass tourism – Goa is a tourism based economy and a leader in this sector, is all set to promote mass tourism. Goa also won the 2nd most popular winter destination in UK.

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3) Monsoon magic - focus on months from April to October

4) Rural & village tourism - the tourism ministry is laying special emphasis on infrastructure development in various rural destinations in India.

5) Medical tourism - the Indian Healthcare Delivery market is estimated at US$ 18.7 billion. The industry is growing at about 13 per cent annually.

6) Luxury tourism – e.g. Palace on Wheels, Palaces

7) Adventure tourism – with emphasis on eco-tourism

Facts about Indian tourism,2011

India• No. of foreign tourist

arrivals(FTA) 6.29m• Growth rate

8.9%• National Departures 14.21m• Growth Rate 9.4%• FEE(INR) GR 19.6%• FEE($US) GR 16.7%

World• No. of international tourist

arrivals(ITA) 983m• Growth rate 4.6%

*FEE=Foreign exchange earning

*GR=Growth rate

India’s position in the world

• Share of India in international tourist arrivals

0.64%• India’s rank in WTA 38• Share of India in ITR

1.61%• India’s rank in WTR 17

Tourism Employment(in Lakh)

• Tourism characterized industry

• Tourism related industry

• 193.57/503.99

• 295.4/670.94

Refer to notes

Support given by the Government

•50% of the profits derived by hotels, travel agents, and tour operators in foreign exchange are exempt from income tax.

•Concession rates on customs duty of 25% for goods that are required for initial setting up or for substantial expansion of hotels.

-In India, inbound tourist expenditure per head is third highest in the world and even more than global average tourist spending.

- India has been promoting its healthcare tourism by providing the visitors with private healthcare facilities. It is expected that the number of tourists visiting India for the purpose of medical treatment will reach one Million by 2012 end, representing a CAGR of 28.09% from 2007.

Opportunities

-Room rent accounts for more than 50% of revenue earned by Indian hotel industry.

- Indian outbound tourist flow is expected to increase at a CAGR of 12.79% over the five-year period spanning 2008-2013.

- Tourist influx to India is expected to increase at a CAGR of 22.65% between 2008 and 2013.

- Disposable income in past (during 2001-2006) grew at a CAGR of 10.11%, thereby driving domestic as well as outbound tourism.

Challenges

• Terrorism• Foreign exchange rate fluctuations• Political risk on international and national

level• Fuel prices• Infrastructure (esp. India)• Economic breakdowns(eg. Eurozone crises)

Tourism the untapped potential:India is a large country with a rich history. The presence of this history is seen in the innumerable heritage sites available throughout the country. India also has a rich religious diversity and history.

Almost every town and Village is dotted with incredible architectures of ancient past. There are innumerable hills, mountains, rivers, lakes that offer tremendous tourism possibilities.

Add to this the need for modern amusement parks, water parks and theme parks. And combine the wide variety of handicrafts and other crafts.

What we get is a potential unparalleled around the globe for a robust tourist industry. The tourist industry of India should be India's greatest Industry.

References:

Data published in circulars by;a) Ministry of tourism ,GOIb) Bureau Of Immigration, GOIc) Reserve bank of India